This financial event could send Bitcoin to $50k by the end of summer 2023
The global economy is currently focused on a possible US default, as there is a battle to raise the borrowing limit.
In the event of such a historic default, market analysts anticipate a potential direct impact on Bitcoin’s (BTC) value considering that the digital currency has established a level of correlation with the traditional financial sector.
Along those lines, Geoff Kendrick, Head of FX Research at Standard Chartered, believes that Bitcoin could rise by around $20,000 to reach around $49,000 from today’s value or a 68% growth if the debt ceiling is not raised by the estimated July deadline and a standard arises, Business Insider reported on April 29.
Kendrick stated that Bitcoin has a reputation for performing well during periods of stress and is often seen as a safe haven due to its decentralized nature.
However, the analyst expects some volatility, noting that Bitcoin may not rally in a straight line as they project a drop of around $5,000 before going back again.
At the same time, he pointed out that while other cryptocurrencies such as Ethereum (ETH) can trade more like stocks and default, Bitcoin’s behavior as a safe haven makes it an optimal trade.
“So actually the optimal trade would probably be long Bitcoin, short Ethereum. A mix like that would probably be a good expression of that,” Kendrick said.
Despite the deadlock between lawmakers on raising the debt ceiling, Kendrick stated that it is a “low probability, high impact event.”
Bitcoin capitalizes on stressful moments
Indeed, if Bitcoin manages to rally on default, it would be the second time this year that crypto has taken advantage of the traditional financial sector fallout to rally. Notably, Bitcoin retesting the $30,000 level after the banking crisis acted as a catalyst.
In general, Kendrick expressed his bullishness towards Bitcoin, predicting that it could rise to $100,000 by the end of 2024 due to various factors, including banking turmoil, Bitcoin halving and the expected end of Fed rate hikes.
“While there are still sources of uncertainty, we believe the path to the $100,000 level is becoming clearer,” he said.
Bitcoin price analysis
Bitcoin is currently trying to regain the $30,000 position as the asset faces increased volatility. At press time, Bitcoin was trading at $29,254, representing weekly gains of around 7%.
The asset’s one-day technical analysis taken from TradingView has become bullish. A summary of the gauges recommends the “buy” sentiment at 14 while the moving average is for a “strong buy” at 13. On the other hand, oscillators are “neutral” at 9.
Overall, Bitcoin’s recent price action has expressed positive sentiment, but has not been enough to break through the next significant resistance region. However, if BTC claims the crucial $30,000 price level, it could indicate an extended bullish rally in the near future.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
